China AI Startup Lands Huge Cash Infusion After US Ban

Just days after Washington told federal agencies to strip its software from their networks, a prominent Chinese artificial intelligence company secured a massive war chest to keep building.

According to a Bloomberg report, DeepSeek raised roughly 100 billion yuan, or about $15 billion, in a funding round that stands as one of the largest in the country's history. The transaction was announced on October 22, 2026, coming just two days after the United States ordered civilian agencies to remove the company's technology due to security concerns. Potential backers for this new capital include major firms such as CATL, the Chinese battery manufacturer, and Tencent, the operator of WeChat. The Hangzhou-based startup intends to use the funds to increase spending on AI infrastructure and open models for markets both inside and outside of China.

DeepSeek's funding history has moved quickly since its creation. The company was founded in 2023 by Liang Wenfeng, a co-founder of the quantitative hedge fund High-Flyer, which helped finance the project's early days. Liang retains an estimated 81.6% stake in its Chinese operating entity. The company drew global attention in early 2025 after releasing its free-to-use, open-weight RI reasoning model, which challenged the dominance of U.S. AI firms. DeepSeek raised more than $7 billion in June 2025 at a $50 billion valuation, and by July 2026, it was reportedly seeking an additional $1.5 billion at a valuation of around $71 billion, with plans for a potential IPO in China as early as next year.

The rapid accumulation of capital reflects a broader trend of heavy investment in the sector globally. Chinese company Kimi developer Moonshot AI secured $2 billion at a $20 billion valuation in May, and Manus AI raised more than $500 million earlier this month. Furthermore, Chinese companies Zhipu AI (Z.ai) and MiniMax, which both went public in Hong Kong in January, have market capitalizations of roughly $29 billion and $7.2 billion, respectively, as of today.

Looking ahead, DeepSeek plans to ramp up spending on AI infrastructure and open models for domestic and international markets, even as it faces restrictions in the U.S. This expansion could further intensify competition among domestic rivals. DeepSeek did not immediately respond to a request for comment.